National Theatre artistic director Nicholas Hytner talks to Terry Grimley about Arts Council cuts, the b-word and his latest production to visit Birmingham.

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Nicholas Hytner found himself in the front-line of the theatre profession's recent spat with the Arts Council when a National Theatre press conference inevitably turned to the subject of the swingeing cuts facing English theatre.

Evidently choosing his words carefully, he now famously accused the council of talking "bollocks" - a comment which drew a belated reproof from Arts Council chairman Sir Christopher Frayling at the weekend, when he said "I don't think calling us 'bollocks' would pass as a critical comment."

Opinions might differ on that subject, but when I spoke to Hytner last week he was reflective and conciliatory, but unrepentant.

"I don't want to be provocative any more," he said. "I don't regret that I spoke up, but I would regret it if anyone felt I was in any way an opponent of the review.

"I'm a great supporter of the Arts Council. I still support the arm's-length principle, though I know some people are questioning it. I don't think anyone disagrees with the principle of looking at how public investment is spent and reviewing where it goes.

"It's got to be correct that no arts organisation is funded in perpetuity, but decisions have to be transparent, and I think many of us feel the speed with which these current cuts have been made, the shortage of time organisations have been given to respond and the troubling nature of these decisions have caused widespread unrest.

"One thing I did try to say which has been less reported is that I have to assume that many of the decisions are under the circumstances the right decisions. Of course, what the Arts Council hasn't done, which is a real mistake, is tell us what exciting things they are planning to do with the money saved.

"It may be that shifting money from company A to company B in many cases is a good call, but the process has been so faulty that even if the ends are good they aren't currently justifying the means. What that has led to is a feeling that the Arts Council simply has to have a good look at how it's going to make these decisions in the future."

Sir Christopher made a revealing comment on Hytner's earlier criticisms when he said: "This is a bit rich of Nick when his National Theatre has been a double winner". Apparently the Arts Council expects its clients to be motivated by self-interest.

But then Hytner's era at the National is generally regarded as having been a great success, largely driven by a rich crop of new plays. Alan Bennett's The History Boys is probably the most spectacular example, while others that have been seen in the West Midlands include Martin McDonagh's The Pillowman, Mike Leigh's Two Thousand Years, Roy Williams' Sing Yer Heart Out for the Lads and Conor McPherson's The Seafarer.

Now the latest National Theatre hit to be staged in Birmingham is Rafta Rafta by Ayub Khan Din, returning to the Rep, where his first play East is East, later a huge success as a film, was premiered in 1997.

Rafta Rafta is based on Bill Naughton's comedy All in Good Time, which was itself turned into a successful film called The Family Way, starring Hywel Bennett and Hayley Mills, in 1966. The story about a pair of young newlyweds unable to consumate their marriage while living in a crowded working-class household was regarded as daring at the time.

How did the idea of revisiting Naughton's play, with an Asian family now occupying the same house in Bolton, come about?

"It was Ayub's idea," Hytner explains. "I had been saying write us a play, write us a play, and he came to me one day and said he wanted to do this. It was one of his dad's favourite films. He had been at a BAFTA evening and it was only then he realised the film was based on a play.

"He got hold of the play and realised the house in Bolton would now be occupied by an Asian family. In 2007/8 that could only happen in an Asian family, that the virginity of a bride and bridegroom could be an issue. That's not imaginable outside an Asian family in this country.

"At that moment it fell into place. Reimagining this play, with the same house, same action, and characters based on the same characters, would really work."

How close is Rafta Rafta to All in Good Time?

"It's pretty close. It's the same house, same characters and the same kind of stuff they say. There's bits he's completely taken out and the dialogue he has to a certain extent rewritten, but what they are saying adds up to the same thing.

"But what is so attractive and so striking is that it works 100 per cent as a play that Ayub might have written himself if he was setting out to write a comedy about an Asian family in Bolton. But when you make the connection with the family that might have lived in this house it adds a real fascination to it."

East is East was a key work in staking out a distinctive British-Asian culture, and Rafta Rafta continues in the same vein as a play about an Asian family which you don't need to be Asian to appreciate. And Asian audiences, according to Hytner, were relieved to see a play that got away from familiar themes and stereotypes.

"Ayub, who has a very ironic sense of humour, said the most political thing about the play is that it was not political."

One question it raises is whether more plays by Bill Naughton, a West End playwright best known for Spring and Port Wine, are worthy of revival.

"It would never have occurred to me to look at Bill Naughton if Ayub hadn't come up with this," Hytner admits.

"It's made me rather ashamed, and it forces me to think how many other playwrights there are of the postwar period who are simply not in fashion - particularly in places like the National Theatre. It's encouraged us to dig around."

Meanwhile more new plays continue to roll off the National's production line - Howard Brenton's play about Harold Macmillan, Never So Good, a new Michael Frayn play about the Austrian director Max Reinhardt and a new David Hare play called Gethsemene.

"We've had a really good year of good new stuff that we want to take out," Hytner enthuses. "The relationships we have happening now with Birmingham Rep and The Lowry are great for us."